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U.S.-Mexico Trade War Looms in Tomato Dispute

Fears of a trade war between the United States and Mexico escalated on Thursday following a preliminary decision in the politics of tomatoes. In a surprising and premature ruling, the Commerce Department sided with Florida tomato producers in terminating an agreement that has set a minimum price on Mexican tomatoes imported into the United States over the past 16 years.

The Mexican Government has already threatened to retaliate, with ramifications for other commodity producers caught in the cross-fire. Earlier this week, Secretary of Economy Bruno Ferrari had promised that if the United States makes a hasty decision, instead of conducting a standard 270-day review, “Mexico will use all our legal means to defend our producers.” A final ruling could also endanger talks over other bilateral trade disputes.

For Mexican tomato growers, termination of the agreement would allow U.S. growers to file formal complaints accusing the Mexicans of unfair trade practices, which they did repeatedly before the agreement’s adoption in 1996. The Mexicans argue that they are being punished for their success—for growing a superior product and for honoring the pact over 16 years.

Thursday’s announcement seemed particularly harsh given the timing: Mexican tomato producers were scheduled to meet with officials at the Commerce Department on Friday to discuss ways to resolve the dispute. The growers have said they are willing to accept a higher floor price for their tomatoes.

Instead of taking the opportunity to renegotiate the pact, the Commerce Department is risking a major trade war with one of our closest trading partners. Mexico is also expected to support many U.S. positions when it joins the next round of Trans-Pacific Partnership negotiations in December. The victims will not only be a vital Mexican industry, but also U.S. consumers and distributors.

No wonder that the outgoing Mexican administration is so incensed. For Ambassador Arturo Sarukhan, a veteran of the vicissitudes of U.S.-Mexican relations, the motivations are clear: electoral politics in a swing state, not the public interest.

*Kezia McKeague is a contributing blogger to AQ Online. She is director of government relations at the Council of the Americas in Washington DC.

Any opinions expressed in this piece do not necessarily reflect those of Americas Quarterly or its publishers.